Corporate Governance & Ethical Business Strategy Presentation

1. CHRISJAY VARGHESE

2. Corporate governance is the matter which involves a set of rules,
principles, ethics, values, regulations, and procedures. Corporate
governance sets up a system of where directors and directors are
entrusted with duties and responsibilities in relation to the direction of
company matters. For effective corporate governance, its policies need to
be such that the directors of the company should not abuse their power
and instead should understand their duties and responsibilities towards
the company and should act in the best interests of the company in the
broadest sense.

3. The Companies Act, 2013 describes about the laws of provisions
concerning the constitution of the board, board meeting, board
processes, Audit committee, general meetings, party transactions,
disclosure requirements in the financial statements etc.

4. • All shareholders should be treated equally and fairly. Part of this is
making sure shareholders are aware of their rights and how to
exercise them.
• Legal, contractual and social obligations to non-shareholder
stakeholders must be upheld. This includes always communicating
pertinent information to employees, investors, vendors members of
the community.

5. Continues…
• The board of directors must maintain a commitment to ensure
accountability, fairness, diversity transparency within corporate
governance. Board members must also possess the adequate skills
necessary to review management practices.
• Organizations should define a code of conduct for board members and
executives, only appointing new individuals if they meet that standard.
• All corporate governance policies and procedures should be transparent
or disclosed to relevant stakeholders.

6. A business strategy is the combination of all the decisions taken and
actions performed by the business to accomplish business goals and to
secure a competitive position in the market.
It is the backbone of the business as it is the roadmap which leads to the
desired goals. Any fault in this roadmap can result in the business
getting lost in the crowd of overwhelming competitors.

7. A clear ethical business strategy is needed to better enable the
organisation to realise its ethical goals. Ideally, this strategy needs to
include six focus areas. The first two provide the initial foundation and the
remaining four represent primary focus areas of on-going activity needed
to manage a company’s ethics.

8. The ethical standards of an organisation need to be clearly defined via
the company’s values and rules, including the code of conduct and
policies. The values should identify the desired behavioural
parameters, which should be translated into acceptable and
unacceptable behaviours in the company’s code of conduct and
supporting policies.

9. The Companies Act now mandates that most companies (except small
companies) establish a social and ethics committee. But, even in the
absence of legislation, an ethics committee can be a valuable facet of an
ethics strategy.
The value of this committee’s contribution will rest on its composition:
members need to be senior enough that they can make decisions and
authorize necessary actions. However, the ethics committee should not
assume the role of the sole custodian of ethics in the workplace. Instead,
each and every member of the organisation should recognize their role
and contribution to the company’s ethical status – and the committee’s
success will rest on the extent to which they achieve this buy-in.

10. Ethics awareness is a powerful approach in the pursuit of improved
workplace ethics, particular as regards reducing unethical behavior.
Visible policing provides a good example of the impact of awareness.
The private security vehicle which patrols the neighborhood may not
result in many (or any) criminals being apprehended, but their regular
presence serves to raise ethical awareness and, in so doing, acts as a
deterrent to crime being committed in that area.

11. The measurement and monitoring of a company’s ethical status is also a
crucial part of an effective ethics strategy. The dictum that if you can’t
measure something, you can’t manage it applies to ethics as much as any
other area of a business. A positive ethical status lends itself to many
benefits, among others, for customer retention, corporate reputations
and brand equity, while a negative status can be very damaging on many
fronts.

12. If an ethics survey has been conducted, the results will indicate what
actions should be taken in what area of the organisation. The most likely
areas to increase ethical behaviour will be via values, leadership,
organisational culture, communication and training, while reducing
unethical behaviour will largely be via laws, rules and regulations
(including a code of conduct and policies), systems and procedures and
transparency.

13. Building an ethical workplace and reaching a high ethical status are
significant achievements. The task of maintaining an ethical culture
eclipses them, however, because maintenance is a never-ending task. To
realise this requires that companies adopt a strategy based on the
proactive, regular management of ethics which pays on-going attention
to the steps outlined above. Together these focus areas constitute a
sound strategy that can realise the organisation’s ethical goals. It can also
make the difference that distinguishes an ethical organisation from
others, which, in the competitive world of business, is a particularly
valuable outcome.